While the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) provide a base level of provisions which are applicable to all employees in the national workplace system, modern awards and enterprise agreements provide additional minimum entitlements and conditions for employees in certain industries, occupations or, in case of an enterprise agreement, group of employees within a business or group of businesses.
Modern Awards
Modern awards are made by the Fair Work Commission and set out the minimum terms and conditions of employment in addition to the NES.
Modern awards stipulate minimum entitlements in regard to (not limited to):
· pay;
· hours of work;
· rosters;
· breaks;
· allowances;
· leave;
· penalty rates; and
· overtime.
Employers must provide employees with the minimum entitlements set out in the applicable modern award.
Choosing the right modern award
To determine whether a position is covered by a modern award, an employer must:
(a) consider if an industry award applies to the business; and
(b) consider if any of the classifications in the industry award apply to the employee’s position. This assessment is done on an employee by employee/position by position basis.
If there is no industry award or appropriate classification in the industry award, an employer must:
(a) consider if an occupational award applies to the employee’s position; and
(b) consider if any of the classifications in the occupational award apply to the employee’s position.
If there is no industry award, no occupational award or no appropriate classification in an occupational award, the employee may be considered “award free”. In these situations, the NES will form the minimum terms and conditions of the employee’s employment.
Enterprise agreements
Much like modern awards, enterprise agreements also determine minimum terms and conditions. Examples of enterprise agreements include single-enterprise agreements, multi-enterprise agreements and greenfields agreements. An enterprise agreement must be approved by the Fair Work Commission to be enforceable
Enterprise agreements are typically negotiated by an employer and a specified group of employees or their representatives, such as a union. Once approved by the Fair Work Commission, the enterprise agreement will govern the employment conditions of the group of employees for a certain period. Agreements usually contain the following terms and clauses:
· definitions or glossary to explain what words mean;
· hours of work;
· classification structure and rates of pay;
· penalty and overtime rates;
· allowances;
· breaks;
· deductions authorised by an employee;
· a definition of shiftworkers for the purposes of the NES; and
· the relationship between the agreement and the relevant modern award.
If an employee is covered by an enterprise agreement, generally the conditions of a modern award are no longer relevant. However, if the base rates of pay in an agreement are lower than those in the relevant modern award, the base rates of pay in the modern award will apply.
Whilst enterprise agreements include a nominal expiry date to say when the agreement will, in theory, end (which can be any time up to 4 years after the date the Fair Work Commission approves it), the agreement does not end on that date. It continues to operate after the nominal expiry date and only stops when the Fair Work Commission replaces or terminates it.
DISCLAIMER
The information in the package is intended as a general guide only, not legal advice, and specific legal or HR advice should be sought when necessary.
Comentários